§ 32.33 — Improper expenditures of money

New York § 32.33

• Jurisdiction: New York
• Law MHY: Mental Hygiene
• Title E: General Provisions
• Art. 32: Regulation and Quality Control of Chemical Dependence Services and Compulsive Gambling Services

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§ 32.33 Improper expenditures of money.\n Improper expenditures of money shall include, but not be limited to,\nthe following:\n (a) No provider of services issued an operating certificate pursuant\nto this article shall make any charitable contribution of state moneys,\nmedical assistance payments or social security or supplemental security\nincome or any interest or other income earned thereon, except as\nauthorized by the commissioner. Provided, however, the provision of this\nsection shall not apply to receipts or donations from private or\nnon-governmental sources and any interest or other income earned\nthereon, or to monies advanced to employees in accordance with\nperformance of their official duties as employees.\n (b) Notwithstanding the not-for-profit corporation law, no loans,\nconsisting in whole or in part of funding provided by the office, shall\nbe made by a not-for-profit corporation issued an operating certificate\nas a provider of services pursuant to this article to any employee of\nsuch corporation, or to any other corporation, firm, association or\nother entity in which an employee is a director or officer or employee\nor holds a direct or indirect substantial financial interest. A loan\nmade in violation of this section shall be a violation of the duty to\nthe not-for-profit corporation of the directors or officers authorizing\nit or participating in it, but the obligation of the borrower with\nrespect to the loan shall not be affected thereby.\n (c) 1. No contract or other transaction between a not-for-profit\ncorporation issued an operating certificate as a provider of services\npursuant to this article and one or more of its employees, or between a\nnot-for-profit corporation and any other corporation, firm, association\nor other entity in which one or more of such persons are directors or\nofficers of the board or corporation, or employee who receives an annual\nsalary in excess of thirty thousand dollars, or have an indirect or\ndirect substantial financial interest, shall be either void or voidable\nfor this reason alone:\n (i) If the material facts as to such person's interest in such\ncontract or transaction and as to any such common directorship,\nofficership or financial interest are disclosed in good faith or known\nto the board or committee, the board or committee authorizes such\ncontract or transaction by a vote sufficient for such purpose without\ncounting the vote or votes of such interested person; or\n (ii) If the material facts as to such person's interest in such\ncontract or transaction and as to any such common directorship,\nofficership or financial interest are disclosed in good faith or known\nto the members entitled to vote thereon, if any, and such contract or\ntransaction is authorized by vote of such members.\n 2. If such good faith disclosure of the material facts as to the\nperson's interest in the contract or transaction and as to any such\ncommon directorship, officership or financial interest, is made to the\ndirectors or member, or known to the board or committee or members\nauthorizing such contract or transaction, as provided in paragraph one\nof this subdivision, the contract or transaction may not be voided by\nthe corporation for the reasons set forth in paragraph one of this\nsubdivision. If there was no such disclosure of knowledge the\ncorporation may void the contract or transaction unless the party or\nparties thereto shall establish affirmatively that the contract or\ntransaction was fair and reasonable as to the corporation at the time it\nwas authorized by the board, a committee or the members.\n